ADP's closely tracked employment report showed that the private sector created fewer-than-expected new jobs last month, perhaps indicating that the resilient labor market is cooling.
ADP's National Employment Report, which has had mixed success in forecasting jobs gains for the Labor Department's official jobs report, showed that 89,000 new private sector positions were created last month, the lowest level in two years.
The overall tally was down from the 177,000 tally recorded in August and Wall Street forecasts of around 153,000.
Wage readings for both new hires and job leavers, however, will likely be the focus of the report following data from the Bureau of Labor Statistics. That report yesterday, showing a surprise surge in open positions over the month of August to 9.6 million, triggered another sharp selloff in Treasury bonds. That bond move was linked to fears about renewed inflation.
The ADP release showed a year-on-year increase of 5.9% for those remaining in their positions and 9% for those seeking new roles. Both readings were the slowest in nearly two years.
“We are seeing a steepening decline in jobs this month,” said ADP's chief economist Nela Richardson. “Additionally, we are seeing a steady decline in wages in the past 12 months.”
Stock futures were modestly higher following the ADP release, with contracts tied to the S&P 500 indicating an 11 point opening bell gain and those linked to the Dow Jones Industrial Average suggesting a 36 point move to the upside.
Bond yields. which had been soaring amid renewed inflation concern. eased after the report.
Benchmark 10-year note yields, which hit a fresh 2007 high of 4.832% in overnight trading, eased to 4.452% while 2-year notes were pegged at 5.104%.
Last week, the BLS's weekly report showed that just 204,000 people filed applications for new jobless benefits for the week ended Sept. 23, compared with the eight-month low 202,000 reported over the prior period.
That was the lowest since early January, a figure that stoked inflation concern and, in part, triggered the ongoing risk in Treasury yields.
The BLS will publish its official September nonfarm payroll report on Friday, with economists looking for a headline gain of 160,000 new jobs, and a modest uptick in average hourly earnings from August levels.
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